Digital as a Choice

“Our thinking about digitising is from the inside out — we are creating time for our advisors to spend time with clients.”

Insightive.tv: Can you begin by giving us an overview of your digital transformation strategy?

Joe: Fundamentally, we are here to support the wider franchise strategy of retaining our position as the number one private bank in the UK. Because of this, “digital’s” real goal is to provide client choice — provide the convenience of accessing services whenever and wherever they are wanted, on any and every device that our clients care to use. But the real goal is to drive a joined up service and engagement process that recognises that we have multiple channels that we provide to our clients. No matter how digital we become, there is real value in face to face advisors in the market we service.

As head of digital, it may sound a little bit odd, but the secret sauce of a bank like Coutts is the relationships we have, the trust we have earned and service we provide. For the foreseeable future, much of the value that our clients derive actually comes from personal relationships. What we are seeking to do is supplement and augment that to enable client choice. And part of that is certainly making that digital choice one that is absolutely first rate and commensurate of what our clients have come to expect from Coutts on all of our other channels. We also have to make sure that our channels fit together in a seamless manner that allows clients to use them all depending on the circumstance.

Insightive.tv: Is it difficult to balance the need for a human touch with the growing demand for online services?

Joe: Not at all, given appropriate thought and consideration. What we are doing is creating “time for clients.” This could be on the level of providing a convenient digital channel for managing everyday banking at a point that suits them. Or through our concierge service, it is the ability to set up the once and a lifetime holiday, or to get a table in an overbooked restaurant, or front row seats in a theatre that is full — we can make that happen so the client can spend their time how they would prefer to do so.

Similarly, our thinking about digitising is from the inside out — we are creating time for our advisors to spend time with clients. We are trying to make sure that they are more productive and that we do as much with data as we absolutely can, understand the client’s circumstances and preempt their needs in a very short order. By creating more capability, productivity and capacity, it means that the sorts of conversations that our advisors can have with clients are of ever high order. We are not there to just deal with transactional requests, although we do do that. But by taking that need away from the advisors, because clients are choosing to self-service, it allows our advisors to spend quality time with clients and help them in meaningful ways.

Insightive.tv: Do you think that digitisation is bringing new levels of risk into the business?

Joe: I don’t think so. With any form of change, digital or not, there is execution risk and proposition risk. But, again, if it is well considered by experienced people who can deliver that change, it can be managed. I think, in many ways, digital can help mitigate against risk that exists in traditional banking models. What you end up doing is distilling things down to ones and zeros, so you can be very clear about what the audit trail has been around a particular action, and be very clear about where advice has been given, where it has been accepted, and where it has been rejected. Because it provides full transparency, I think that as long as you are positively risk-centric, so seeking to help clients and progress the business in a way that manages risk but does not become too restrictive, I think that digital change can be hugely helpful in reducing that risk profile.

Insightive.tv: Do particular business issues at Coutts act as drivers of your information security program?

Joe: Without cliche, security is the number one priority for us. I would describe all digital services and all propositions as having a trust reflex. And I think that the trust reflex of clients being served by an organisation such as ourselves may be even more pronounced. This creates risk for the phishing process that is used to target a lot of organisations. Similarly is “vishing” — voice phishing — where you would receive a call from someone purporting to be from your bank asking for login credentials to reverse transactions on your account that look suspicious, all the while using those credentials to commit the actual fraud.

Everything that we do is about establishing a trusted advisory relationship. And we have to make sure that every interaction we have with our clients lives up to that standard. So we have to make sure that we are delivering very high usability and client convenience while ensuring security.

One of the most recent developments that we launched, in the last few weeks actually, was specifically designed to mitigate this risk while improving the usability of the client experience — Coutts ID. This is the replacement for a one-time passcode device. If you imagine that you are sitting in front of your device and log onto your account online. Coutts ID will allow you to immediately get a secure push message to your phone, in effect asking you if you just logged on and allowing you to accept or reject this action. This is relevant because it is convenient to the client. But not only is it a better experience, it eliminates codes that can be intercepted and used against you. Because you are using a mobile phone, we do not have to ask clients to carry around another peripheral with them. People will say that other banks already do this — but these programs all send codes, and these codes can still be intercepted. Coutts ID is a UK first that eliminates risk and makes a process easier for clients.

Fraud and security, both from a financial and reputational standpoint for our clients and for the bank are material. We have invested a lot of time, solving those issues and ensuring that the model that we have in place is using the investment we have the best we can, and strikes a balance between usability and security. We were one of the first banks to implement mitigations against denial of service attacks. As an organisation, we have a track record of innovating in the security space. When Coutts first stood up its online banking channel back in 1999, not only was it the first private bank to have an online channel, it was one of the first banks — full stop — to have two factual identification using one-time passcodes.

It is very hard to model future fraud. I think that what we know is that fraud is not going to go away, it will increase in sophistication, and is already quite sophisticated in many instances today. This comes down to very basic demands on judgement regarding what is required to keep our clients safe. We kind of stepped over that line a number of years ago because, ultimately, we are a bank for our clients. Clients who do not think a bank is secure will take their business elsewhere. So, for us, it is a basic requirement to be as safe as you can be, to minimise the financial loss, and address any reputational consideration. And those considerations are not immaterial, it is a reputational risk that may affect some of our clients.

When it comes to business cases and justifying investment in security, in generally, this is one of the easiest discussions that we have as an executive team because we place such a high importance on it.

Insightive.tv: Can you tell us about any other recent developments you have made in cybersecurity to protect your customers and/or comply with recent regulatory changes?

Joe: In terms of regulation, we are currently running a pilot spurred by the recent changes to mortgage regulation that requires us to make sure that all of the conversations we have with clients, either face to face or otherwise, meet the absolute letter of that regulations.

One of the things we are currently piloting is, with the client’s consent, recording conversations. We are then experimenting with overlaying AI algorithms and machine learning on the conversations from a compliance standpoint. This then allows us to create dashboards for our compliance colleagues to rifle through the conversations that have been had with our clients. They can then investigate those, go into the recording, pick out keywords, assess and provide a very exacting degree of quality assurance around the conversations we are having with our clients. It’s innovative because it goes beyond manual methods of assessing whether or not we are being as effective as we can be in meeting the regulatory requirements, and provides a positive training side that allows us to understand how we are meeting the needs of clients. So this pilot began with a regulatory driver, but we are looking to see how we can use that regulatory driver and turn it to go beyond complying with the legislation into something that demonstrably improves the overall clients experience.

Insightive.tv: If you could name a single biggest challenge you think digitisation represents to the financial services, what would it be?

Joe: Remaining relevant, I think, is the number one challenge for anyone who is involved digital space. And part of that is recognising that relevance is defined by the client — it is not a measure that we can define and then work towards. I say that it is the number one challenge simply because what is relevant to people in the digital space is changing so quickly and impacted by so many factors — other bank policies, but really any other digital experience available. The key is that you need to make sure that clients are utilising your digital services not because you are incentivising them to do so, but because it is such a great and relevant experience.

Joe Norburn is Managing Director, Digital & Business Development at Coutts. He heads a team tasked with managing client experiences in all digital spaces ranging from social media to their website and digital transactional services. We spoke with Joe to get a grasp of the digital strategy at Coutts and gain insight into if recent regulatory changes will impact future digital transformation projects.

Coutts is the seventh oldest bank in the world. Founded in 1692, they provide private banking and premier wealth management services as part of the RBS Group. Coutts has historically been a leading innovator in technological adoption, and currently provide an eclectic mix of fully digital to fully face-to-face fueled options for client interactions.